Glencore Xstrata continues to cut the fat

A mining analyst says Glencore Xstrata will continue indefinitely to cut costs at its mining operations.

The recently merged company is the world's fourth largest copper producer and ships more thermal coal than any other miner on earth.

Glencore Xstrata announced earlier this week that it would cease mining iron ore at its Ernest Henry Mine north east of Cloncurry.

This follows last month's announcement that it would cut 450 jobs at coal mines in Central and North Queensland.

But David Lennox, from stockbroker Fat Prophets, says it's not just iron ore and coal that'll be on the chopping block.

He says copper mines could also cease production under Glencore's strategy to stay profitable.

"They will be, in due course, obviously looking at their copper operations globally, not just at Ernest Henry and they will be putting those operations up against a measure of return that they would be expecting to see.

"At the moment, copper is trading at around 3.13 or 3.14 US dollars a pound, if we saw copper prices start to move lower towards $3 a pound, then there would be certainty that Glencore would be reviewing its copper operations.

"If the price stays the same or even rises, we could certainly expect to see Ernest Henry still producing copper in 2014."

The ABC understands two contracting companies were laid off as a result of magnetite no longer being mined at Ernest Henry Mine.

In a statement, Glencore Xstrata said no one directly employed by the company had lost their jobs.